i n t e r n a t i o n a l j o u r n a l o f h y d r o g e n e n e r g y 4 5 ( 2 0 2 0 ) 1 7 0 6 7 e1 7 0 7 5

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Critical assessment of the production scale

required for fossil parity of green electrolytic
hydrogen

Joris Proost*
Division of Materials and Process Engineering, Universit
e Catholique de Louvain, 1348 Louvain-la-Neuve, Belgium

highlights

Electrolytic H2 is fossil-free when produced from renewable electricity.

Today's price of H2 from fossil-based SMR processes (fossil parity) is 2,0 V/kg.

This can be reached for electrolytic H2 at a renewable electricity price of 30 V/MWh.

The required electrolyser CAPEX of 500 V/kW can be reached already at a few MW.

Such small-scale allows for decentralised H2 production in line with local H2 demand.

article info abstract

Article history: Hydrogen produced from renewable electricity through Power-to-Hydrogen can facilitate
Received 9 March 2020 the integration of high levels of variable renewable electricity into the energy system. An
Received in revised form electrolyser is a device that splits water into hydrogen and oxygen using electricity. When
27 April 2020 electricity is produced from renewable energy sources, electrolytic hydrogen can be
Accepted 29 April 2020 considered to be green. At the same time, electrolysers can help integrate renewable
Available online 27 May 2020 electricity into power systems, as their electricity consumption can be adjusted to follow
wind and solar power generation. Green hydrogen then also becomes a carrier for
Keywords: renewable electricity. Key green hydrogen production technologies, mostly PEM and
Power-to-hydrogen alkaline electrolysers, are still further maturing, both in technical (efficiency), economical
Electrolyser (CAPEX) and durability (lifetime) performance. Nonetheless, we will show in this contri-
Renewable electricity bution how fossil parity for green hydrogen, i.e. a Total Cost of Ownership (TCO) similar to
Fossil parity grey H2 coming from todays CO2 intensive SMR processes, can already be achieved today.
Moreover, this can be realised at a scale which corresponds to the basic units of renewable
electricity generation, i.e. a few MW.
© 2020 Hydrogen Energy Publications LLC. Published by Elsevier Ltd. All rights reserved.

this context, low-carbon electricity from renewables may

Introduction become the preferred energy carrier. The share of renewable
electricity in all of the energy consumed by end users world-
The global energy system has to undergo a profound trans- wide would need to increase to 40% in 2050 (from about 4% in
formation to achieve the targets of the Paris Agreement. In

* Corresponding author.
E-mail address: joris.proost@uclouvain.be.
https://doi.org/10.1016/j.ijhydene.2020.04.259
0360-3199/© 2020 Hydrogen Energy Publications LLC. Published by Elsevier Ltd. All rights reserved.
17068 i n t e r n a t i o n a l j o u r n a l o f h y d r o g e n e n e r g y 4 5 ( 2 0 2 0 ) 1 7 0 6 7 e1 7 0 7 5
2015) to achieve the decarbonised energy world envisaged by
the agreement [1]. In absolute terms, this implies that the total
installed renewable power capacity should increase from
about 1.500 GW in 2015 to more than 15.000 GW in 2050, i.e. a
10-fold increase [2]. However, the total decarbonisation of
certain sectors, such as transport, industry and applications
that require high-grade heat, may be difficult purely by means
of electrification. This challenge could be addressed by green
hydrogen produced electrochemically from renewables (so-
called Power-to-Hydrogen or P2H [3]), allowing large amounts
of renewable electricity to be channeled from the power sector
into these end-use sectors [4]. Renewable electricity can be
used to produce green hydrogen via water electrolysis, a well-
known process splitting acidified or alkalised water into ul-
trapure (up to 99.998%) H2 and O2 [5]. Such electrolytic H2 can
then further be used downstream as a green and clean
chemical feedstock material in sectors otherwise difficult to
decarbonise through electrification. The latter include both
the chemical industry itself, as well as new applications in the
transport sector [6]. As to the first, hydrogen is currently
already widely used in several industrial sectors (refineries,
ammonia production, bulk chemicals, etc.), with the majority
of it being produced from natural gas by steam-methane
reforming (SMR), a vast CO2-intensive process [7]. Green
hydrogen from renewables could replace such fossil fuel-
based feedstocks in high-emission applications. For the
transport sector, fuel cell electric vehicles (mainly cars and
busses) provide already today an attractive low-carbon
mobility option when the hydrogen is produced from renew-
able energy sources, and offer driving performances compa-
rable to conventional vehicles. On the longer run, H2-based
electrofuels, i.e. liquid fuels produced from renewable power,
can also replace fossil fuels in the freight sector (including
aviation and heavy-duty rail and trucks), without the need to
change end-use technologies [8].
Although water electrolysis is already a well-established H2
production technology for almost a century [9], its large-scale
implementation for the production of green H2 has been
hampered mainly by cost issues. In a recent review [10], the
production cost of hydrogen from electrolysis has been
extracted from a large amount of litterature data, resulting in
a very wide range of cost values, ranging from about 2 V/kg to
20 V/kg. This was attributed to the large variability of the
underlying assumptions and working parameters of the
different sources, the production scale being the most
important one [11]. Moreover, when evaluating the potential
and economic viability of such green hydrogen production by
water electrolysis, the current price of fossil SMR-based H2
often appears as a rather challenging benchmark [12]. For a
fair comparison though, it was recently pointed out [13] that
one should always keep in mind that the industrial SMR pro-
duction price is usually considered for immediate use, while
often additional storage is necessary to meet fluctuations in
demand and delivery as well. On top of that, hydrogen from
SMR still needs to be purified for most applications in order to
reach the same grade as electrolytic one. Moreover, in such
cost comparisons, the potential valorisation of ultra-pure
electrolytic oxygen (8 kg for each kg of H2) is totally neglec-
ted. In any case, on a macro-economical level, according to
Ref. [14], the global hydrogen feedstock market represented in
2015 a total estimated value of 115 billion V, corresponding to
a hydrogen demand of about 56 Mton/yr. By dividing the total
estimated market value by the total worldwide hydrogen de-
mand at the same year, a reasonable first-order estimation of
the “average” market price for fossil H2 can then be obtained
as 115/56 y 2,0 V/kg. In the current paper, we aim at critically
assessing the production scale that would be required to reach
such fossil parity using electrolytic hydrogen.
While doing so, it is important to acknowledge that sig-
nificant regional differences may still exist on a micro-
economical level. This is not only due to geographical varia-
tions in the production price of SMR H2, but also depending on
the availability of sufficient and low-cost renewable elec-
tricity. It is for instance well-known that the production cost
of hydrogen from SMR is significantly influenced by natural
gas prices, which account for 45%e75% of the total SMR pro-
duction cost. As a result, the low gas prices in the Middle East,
the Russian Federation, and North America give rise to some
of the lowest hydrogen SMR production costs, sometimes
even down to 1.5 V/kg [15]. On the other hand, gas importers
such as Japan, Korea, China and India have to contend with
higher gas import prices, which inevitably results in higher
hydrogen production costs. As a result, it will be much more
feasible for electrolytic hydrogen produced from renewable
electricity to compete effectively with SMR in countries
relying on natural gas imports and characterised by good
renewable resources.
Hydrogen production
Hydrogen production today
As of today, hydrogen is being used as a specialty chemical in
a number of applications. These are generally classified into 4
main categories [14], as illustrated in Table 1: (1) the chemical
industry, where H2 is a basic building block for the synthesis of
ammonia, methanol and a number of technical polymers; (2) a
number of downstream refining processes, like hydro-
cracking and hydro-treating; (3) iron, steel and glass
manufacturing, where H2 is the preferred reducing gas during
Table 1 e Today’s major industrial sectors using H2. For
each sector, a typical unit plant size is given (in Nm3/h2
demand), as well as the corresponding equivalent
electrolyser power.
Industry Key Applications Unit plant size Equivalent
Sector (in Nm3/h2 electrolyser
demand) power
Chemical Ammonia (NH3) 80.000 400 MW
Methanol (CH3OH) 10.000 50 MW
Refining Hydrocracking 400.000 2.000 MW
Hydrotreating
Iron & Annealing 400 2 MW
Steel Blanketing gas
Forming gas
General Semiconductor 50 0,25 MW
Float glass production
Propellant fuel
Cooling of generators
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annealing, blanketing and forming processes; (4) other spe-
cialty applications, like the semiconductor industry, the use as
a propellant fuel or the cooling of generators. The first two
categories represent with 65% by far the largest contribution
to the total H2 demand, followed by refining, iron, steel and
glass manufacturing (all together about 25%) and the
remaining 10% for the other specialty applications.
An important difference between each of these 4 categories
is the scale of the so-called unit process or production size, i.e.
the typical individual plant or reactor capacity required to
generate the appropriate amount of H2 feedstock in each
application. Table 1 gives in this respect some indicative
numbers (in Nm3/h of H2 demand) for each of these 4 cate-
gories. In its last column, it also provides the equivalent
electrolyser capacity that would be required to satisfy these
unit size H2 feedstock demands by on-site electrolytic H2
production (assuming a state-of-the art electrolyser efficiency
of 70% [16], corresponding to a renewable electricity need of
47,1 kWh/kg H2). Large variations in production scale can be
noticed across the different sectors, ranging from about
250 kW at the low-end (typical for float glass production) to a
few GW at the high-end (typical for H2 demand in refineries).
As of today, the great majority of all of the above H2 is being
delivered by a centralised, off-site hydrogen production,
dominated by 2 large-scale chemical processes: steam
methane reforming (SMR) and coal gasification. According to
Ref. [15], these processes made up about 76% and 23%
respectively of the total H2 production in 2018. Unfortunately,
as shown in Fig. 1, both of these processes are heavily CO2
intensive, SMR emitting up to 8 tons of CO2 per ton of H2
produced. Therefore, with the objective of reaching the CO2
emission targets in todays fossil-based H2 production, the part
of green electrolytic hydrogen production from renewable
electricity (which represents less than 4% today) can be ex-
pected to significantly increase over the coming years. In order
to meet the current global H2 demand of around 60 Mton/year,
a total of 300 GW installed electrolyser capacity would be
needed. As this represents today about 20% of the total
installed renewable power capacity, such massive electrolyser
deployment is currently not very realistic. As a result, a se-
lection of technologically feasible market penetrations for
electrolytic H2 needs to be made. Such selection also implies
Fig. 1 e Summary of today’s main hydrogen production
technologies.
17069
that todays local H2 consumers, besides becoming local (on-
site) producers of renewable electricity, also need to become
local (on-site) producers of electrolytic H2, at a production
scale which still allows to meet the stringent requirement of
fossil parity at about 2,0 V/kg. On the longer run, with the
projected 10-fold increase in renewable power to 15.000 GW in
2050, a mere 2% use of this capacity would be required to
satisfy the equivalent 300 GW water electrolysis demand. This
can be considered to be within the range of grid balancing
services, making such green electrolytic hydrogen production
on the long run an even more viable and attractive alternative
hydrogen production technology.
The above suggested transformation from centralised (off-
site) fossil-based H2 production to a decentralised (on-site)
green electrolytic H2 production provides a significant para-
digm shift, allowing local consumers to become local pro-
ducers as well. Up to now, in an industry largely governed by
CO2-intensive chemical processes, such a local H2 production
in line with the local H2 consumption was simply not feasible,
because of the minimum production scale required for both
SMR and coal or oil gasification. The latter typically starts at a
few 10.000 Nm3/hr (about 8000 ton/yr) for the smallest unit
size installations, equivalent to a 50 MW electrolyser. As can
be seen in Table 1, this largely exceeds the industry needs in a
number of applications (iron & steel, as well as general in-
dustry). Moreover, additional CO2-intensive logistics (incl.
Transport, compression and storage) are required in these
applications as well.
Green hydrogen production scale-up
Contrary to the intrinsically large-scale SMR, water electrol-
ysis is intrinsically small-scale, as illustrated in Fig. 2. Both the
geometrical area of the electrodes (a few m2 at most) and the
number of electrodes that can be compiled in series in a single
stack is relatively limited. As a result, the unit size of water
electrolysers has long been limited to the kW-range, a typical
on-site containerized production unit being a few 100 kW at
most. However, in order to be able to realise the mandatory
coupling to renewables, mainly wind and solar, the power
scale of water electrolysers needs to become of the same order
Fig. 2 e A typical unit size configuration for an industrial
alkaline water electrolyser.
17070 i n t e r n a t i o n a l j o u r n a l o f h y d r o g e n e n e r g y 4 5 ( 2 0 2 0 ) 1 7 0 6 7 e1 7 0 7 5
Fig. 3 e Projected cost reduction associated with a scale-up
of green electrolytic hydrogen production. The blue
diamonds represent real CAPEX data for PEM electrolysers,
except for the ones between 100 and 1000 Nm3/hr, which
are cost projections. The red squares and green triangles
are real SMR CAPEX data for small-scale (on-site) and large-
scale (centralised) reformers, respectively. Taken from
Refs. [17]. (For interpretation of the references to color in
this figure legend, the reader is referred to the Web version
of this article.)
of magnitude as the renewable electricity source itself. As
illustrated in Fig. 3 (reproduced from Ref. [17]), this requires a
major scale-up from the kW-scale, typical for state-of-the art
electrolysers about a decade ago, towards the multi-MW scale
typical for state-of-the art on-shore wind turbines today. Fig. 3
also shows that this mandatory scale-up has the potential to
Fig. 4 e Examples of multi-stack alkaline electrolyser
systems: (a) A 135 MW electrolyser plant from 1953 [23]; (b)
Current multi-MW plant designs from a major electrolyser
manufacturer, based on a single stack electrolyser capacity
of 2,2 MW [24].
Fig. 5 e Electrolytic H2 production cost as function of
electrolyser’s annual operating time (1 yr ¼ 8760 h),
simulated according to Eq. (1) for two different CAPEX/
electricity cost combinations. The electrolyser’s efficiency
was fixed at 70%, corresponding to 47,1 kWh/kg. The
additional dashed trendlines for the 2 data sets include,
besides the electricity cost, also an additional fixed OPEX
cost equal to 30% of CAPEX.
significantly reduce the investment cost (CAPEX) of electro-
lysers, potentially reaching the same order of magnitude as
small-scale SMR installations from the MW-level onwards.
Such an electrolyser scale-up has initially been realised by
increasing the number of cells per stack, as illustrated in Fig. 2.
However, from the state-of-the-art data that we recently
collected from a number of electrolyser manufacturers, such a
“keep-on-stacking” approach seems to have a practical limit
at around 100 cells/stack [18]. Beyond that number, other
balance-of-plant issues come into play, including the risk of
electrical shorts [19] and the technological complexity of a
safe large-scale gas collection [20]. There are also a number of
specific issues related to electrochemical reactor design, like
the increased risk of a non-homogenous electrolyte distribu-
tion when pumped through a larger stack [21], and a non-
homogeneous current distribution within the different cells
[22]. Note that this apparent 100-cell limitation is by no means
a stringent intrinsic limitation, but rather an empirical
observation based on the above cited industrial data. In other
words, it appears that for a number of electrochemical and/or
technical reasons, electrolyser manufacturers are currently
preferring to upscale production capacity modularly, rather
than increasing the capacity of a single stack.
As a result, for (multi-)MW applications, multi-stack elec-
trolyser systems are typically being used. As an example, Fig. 4
shows both an iconic historical illustration of a 135 MW
alkaline electrolyser plant dating back already from 1953 [23],
and a number of today's multi-MW plant designs from a major
electrolyser manufacturer, based on a single stack electrolyser
of 2,2 MW [24].
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Fossil parity for green hydrogen

The cost of electrolytic hydrogen

While Fig. 5 shows that it is technically feasible to produce

green electrolytic hydrogen at the multi-MW scale
(even > 100 MW), the critical question still remains at what
price/cost. Clearly, if green H2 is to become competitive with
today's “grey” SMR H2, it should be made available at its cur-
rent market price, i.e. around 2,0 V/kg. In this respect, Fig. 5
illustrates the effect of the 3 major parameters affecting the
electrolytic H2 production cost: the operational time of the Fig. 6 e Documented and extrapolated decrease in average
electrolyser (in full load hours or FLH), the cost of renewable auction prices for renewable electricity from solar PV and
electricity (ELCTR, in V/MWh), and the electrolyser CAPEX on-shore wind (from Refs. [26]).
(CPX, in V/kW). The basic equation used for this first-order
cost simulation is as follows
renewable electricity from both solar PV and on-shore wind.
 
ELCTR CPX 1 Clearly, prices on the order of 30 V/MWh can be expected to be
H2 costðV = kgÞ ¼ þ , ,ε (1)
1000 10 FLH realistic already as of 2020. At the same time, this very study
also projects load factors of combined wind and solar power to
where ε represents the electrolyser power consumption (in
exceed 50% in vast areas. A recent German field study
kWh/kg). With respect to the latter, the theoretical minimum
reporting on the operational experience of a 6 MW Power-to-
value εth for obtaining H2 through electrochemical water
Hydrogen demonstration plant seems to confirm these
splitting can simply be calculated based on a 2 electron
promising numbers [27]. During its initial testing phase, when
reduction step
operation time was limited to 8 h during working days, the
electrolyser load demand curve led to an average electricity
2Hþ þ 2e ¼ H2 (acid) (2)
cost (as purchased from the EPEX SPOT day-ahead auction
market) of about 36 V/MWh. After full automation of the plant
2H2O þ 2e ¼ H2 þ OH (alkaline)

With 1 kg of H2 requiring 103 F Coulomb (F being Faraday's

constant), 1 kg/h of H2 then corresponds to an electrical cur-
rent of (96487$103)/3600 ¼ 26802 A. Multiplied by the theoret-
ical water decomposition potential of 1.23 V, this then gives a
theoretical minimum power consumption εth ¼ 33 kWh/kg. A
typical electrolyser efficiency being 70% [16], a typical ε-value
to be used in Eq. (1) is therefore 33/0.7 ¼ 47.1 kWh/kg. Also
note that in Eq. (1), the factor 1/1000 in the first term serves to
convert MWh into kWh, while the factor 1/10 in the second
term comes from a linear depreciation for a 10 years electro-
lyser operation.
First of all, for the red set of parameters in Fig. 5, i.e. a
CAPEX of 1000 V/kW and a renewable electricity cost of 70 V/
MWh (as taken form [25], a reference which dates back already
from 2014), it is clear that producing H2 from water electrolysis
is not always economically viable with respect to the current
SMR benchmark price of 2 V/kg. In particular, before becoming
a realistic alternative production technology, there is a need
for cheap (er) renewable electricity (well below 70 V/MWh),
the investment cost of electrolysers needs to be brought down
(well below 1000 V/kWh), and there should preferably also be a
clear industrial commitment to CO2 reduction. The latter
might notably impose an additional tax/cost to SMR H2,
helping to further close the gap with electrolytic H2.
Luckily, with respect to the red parametric values used in Fig. 7 e State-of-the-art CAPEX data for alkaline
Fig. 5, significant progress has been made since 2014, both in electrolysers as a function of power input. The change in
reducing the price of renewable electricity and in reducing the slope for alkaline electrolysers corresponds to the use of
electrolyser CAPEX. As to the first, Fig. 6, taken from a recent multi-stack systems.
study from the International Energy Agency (IEA) [26], shows
the projected reduction in average auction prices for
17072 i n t e r n a t i o n a l j o u r n a l o f h y d r o g e n e n e r g y 4 5 ( 2 0 2 0 ) 1 7 0 6 7 e1 7 0 7 5

to a 24/7 operation so that electricity could be bought in times

of low spot prices, additional cost savings of more than 15 V/
MWh could be realised.
Secondly, as to the electrolyser CAPEX, Fig. 7 shows state-
of-the-art data from NEL, one of the world's largest alkaline
electrolyser manufacturers. They clearly show a significant
decrease well below the value of 1000 V/kW used for the red
data set in Fig. 5. In particular, a CAPEX value of 750 V/kW,
considered by utility providers to be the capital cost for storing
renewable electricity, is already realistic today for a single
stack 2 MW system. Moreover, a significant further reduction
in CAPEX as low as 500 V/kW is projected for multi-stack
systems when scaling up to 50e100 MW. Also note from
Fig. 7 that single stack electrolysers are much more suscepti-
ble to CAPEX reduction than multi-stack systems when Fig. 9 e Total Cost of Ownership (TCO) of electrolytic H2
upscaled. (delivered at 35 bar) as a function of power input, obtained
Based on the above updated numbers, the green data set in from the Danish electrolyser manufacturer
Fig. 5 then allows to anticipate a significant reduction in the GreenHydrogen. Prices are based on a 10 years operation
electrolytic H2 production cost. Indeed, assuming the most (including a 10 year’s service and maintenance agreement)
favorable but still realistic CAPEX value of 500 V/kW in com- for a complete turnkey, containerized alkaline electrolyzer
bination with an electricity cost of 30 V/MWh and a state-of- unit (including inverter and water treatment), delivered
the-art electrolyser efficiency of 70% (i.e. 47,1 kWh/kg), green and installed in Europe. OPEX includes the use of
electrolytic H2 can indeed start competing with SMR from 4500 electricity, water and nitrogen (for purge), assuming a
operating hours onwards (i.e. a load factor of about 50%). Note renewable electricity price of 40 and 45 V/MWh,
that under these conditions, the total H2 cost calculated from respectively.
Eq. (1) comes down to 1,95 V/kg and is mainly determined by
the electricity cost, which represents 47,1*0.03 ¼ 1,41 V/kg or
72%. One should therefore be aware that any efforts to further
reduce the CAPEX of alkaline water electrolysers below 500 V/
kW will only have a minor overall effect. For instance, for a Instead, Eq. (1) indicates that it will be much more effective
CAPEX of 250 V/kW, Fig. 8(a) shows that the total H2 cost goes to focus technological efforts on improving the electrolyser's
down to 1,68 V/kg, of which only 15% would come from the electrochemical efficiency, since the related power con-
very stringent techno-economical measures needed to reach sumption ε is a common factor to both the OPEX and CAPEX
such low CAPEX value. part. The main effect of an efficiency increase, which is
equivalent to a lower kWh/kg H2 electricity consumption, is

Fig. 8 e (a) Simulated electrolytic H2 production cost as a function of electrolyser CAPEX, assuming a 70% efficiency (i.e.
47,1 kWh/kg) and a 50% load factor (i.e. 4380 h/year). Renewable electricity price was fixed at 30 V/MWh, corresponding to
47,1* 0.03 ¼ 1,41 V/kg. The right axis gives the resulting % contribution of the electrolyser CAPEX to the total H2 cost; (b)
Renewable electricity price (in V/MWh) as a function of electrolyser efficiency to arrive at an electrolytic H2 cost of 2.0 V/kg
for three different CAPEX values (500, 1000 and 2800 V/kW).
 i n t e r n a t i o n a l j o u r n a l o f h y d r o g e n e n e r g y 4 5 ( 2 0 2 0 ) 1 7 0 6 7 e1 7 0 7 5
that it allows to relax the sometimes rather stringent condi-
tions on the renewable electricity price needed to reach fossil
parity. In this respect, Fig. 8(b) shows, as a function of elec-
trolyser efficiency, the renewable electricity price (in V/MWh)
that would be needed to arrive at an electrolytic H2 cost of
2,0 V/kg for three different CAPEX values: 500, 1000 and
2800 V/kW. The last one can be considered, according to
Ref. [15], to be a realistic CAPEX target value by 2030 for solid
oxide electrolysers (SOE). These are especially known for their
high intrinsic efficiency (up to 90%) resulting from high tem-
perature operation (650e1000  C). Nonetheless, from the
negative red data in Fig. 9(b), it can be seen that even in that
case the higher SOE efficiency will still not be able to provide
electrolytic H2 at fossil parity. This would require SOE CAPEX
values to decrease even further, down to a level of 1000 V/kW.
We do acknowledge that the trends presented in Figs. 5 and
8 should be considered to be a first-order cost simulation,
based on the rather basic Eq. (1). For instance, most other
economic analyses tend to add a yearly interest rate (typically
7e10%) and in some cases an additional OPEX contribution on
top of electricity cost (up to 30% of CAPEX). We have decided
here not to do so, as the exact numbers are often rather
arbitrary chosen. Moreover, they barely change the principal
trends induced by varying the major parameters (i.e. elec-
tricity price, capacity factor, CAPEX and efficiency), which are
already included in our basic Eq. (1). This has been explicitly
illustrated in Fig. 5 by the two additional dashed trendlines,
which include an additional fixed OPEX cost equal to 30% of
CAPEX.
Finally, for a fair comparison, an additional CO2 price for
SMR H2 should be taken into account as well [28]. In this
respect, the seminal IEA report “The Future of Hydrogen” [15]
predicts an average increase of 50% in the hydrogen produc-
tion cost from SMR when imposing a carbon price of 100$/
tCO2. This might even trigger the large-scale implementation
of CCUS, which would become economically attractive if CO2
prices were above 50$/tCO2. Adding CCUS to SMR plants
would then lead in turn to cost increases of about 50% in terms
of CAPEX and 10% for fuel, the exact amounts depending on
the plant design. It also leads on average to a doubling of OPEX
as a result of CO2 transport and storage costs [15]. Nonethe-
less, our above projections, without considering any carbon
price, are sufficiently promising as such to stimulate already
today a further penetration of water electrolyser technology
for renewable energy storage purposes. At the same time, they
should also provide confidence for the ultimate consideration
of electrolytic H2 as a basic chemical building block, enabling
direct coupling to renewable electricity production and hence
helping to green the chemical feedstock industry.
The scale of fossil parity for green hydrogen
A final issue then relates to the production scale that is
required for obtaining such fossil parity with electrolytic H2.
Indeed, from the data in Fig. 7, one could wrongly conclude
that reaching the required reduction in electrolyser CAPEX
down to 500 V/kW would require very large-scale electrolytic
H2 production units, on the order of 100 MW. In that case, the
minimum scale for economically viable electrolytic H2 pro-
duction would need to become similar to current SMR
17073
installations (cfr. Fig. 3). As already suggested from Table 1, for
some feedstock applications, like ammonia or methanol pro-
duction, such a large unit size can be relevant even for an on-
site, decentralised green H2 production. However, Fig. 7 in-
dicates that there might still be a much smaller production
scale for reaching such low CAPEX values. Indeed, when
extrapolating the CAPEX data of single-stack alkaline elec-
trolysers in Fig. 7, the level of 500 V/kW (dashed horizontal
green line) can already be reached around 3e4 MW. Such a
significant reduction in the scale required for fossil parity is
directly related to the much steeper reduction in CAPEX that
can be realised for single-stack as compared to multi-stack
systems. A straightforward consequence of the above obser-
vation is that the minimum investment cost needed to install
electrolytic hydrogen production units capable of delivering
green H2 at fossil parity goes down significantly as well: from
about 100$103*500 ¼ 50 MV to a mere 200 kV, a very realistic
number in view of a local, decentralised production.
Even more direct corroborating evidence for this relatively
small-scale fossil parity for green electrolytic H2 is provided in
Fig. 9. The latter presents state-of-the-art industrial data for
the Total Cost of Ownership (TCO) of electrolytic H2 as a
function of power input, as obtained from GreenHydrogen, a
Danish electrolyser manufacturer who produces pressurized
stacks. Values are based on a 10 year operation, including a 10
years’ service and maintenance agreement, for a complete
turn-key, containerized alkaline electrolyzer unit (including
inverter and water treatment), delivered and installed in
Europe. The electrolyser power consumption is guaranteed at
46.7 kW/kg, and delivers H2 at 35 bar. The hydrogen produc-
tion cost in Fig. 9 also takes into account the OPEX part,
including the use of water, nitrogen (for purge) and electricity,
assuming a renewable electricity price of 40 and 45 V/MWh,
respectively. A number of striking observations can be made
from this figure. First of all, these TCO data confirm the trend
already observed in Fig. 7, namely the much steeper decrease
in unit price for hydrogen delivered from a single stack vs. a
multi-stack system. Secondly, until now, it was commonly
agreed that the only option to decrease the electrolytic H2
production cost towards fossil parity was to increase the ca-
pacity of the (multi-stack) system up to 50e100 MW, as
already discussed with Fig. 7. Fig. 9 now clearly shows that in
that case, even a decrease in renewable electricity cost (from
45 to 40 V/MWh) only slightly affects the scale of fossil parity,
due to the relatively small decrease in TCO with power typical
for such multi-stack systems. As a result, large-scale electro-
lyser systems would still be necessary to reach fossil parity.
However, as suggested by the dashed red line in Fig. 9 through
the TCO data for single stack systems, there is another tech-
nological alternative. It consists of extending the power input
that can be taken up by a single-stack electrolyser up to a few
MW, the exact power depending on the electrolyser technical
characteristics. This then also corresponds to the scale of the
basic units of renewable electricity generation. Also note that
when considering an even more stringent SMR price level of
1.5 V/kg (corresponding in Fig. 9 to the horizonal axis rather
than the dashed green line at 2.0 V/kg), our conclusions on the
required scale for reaching fossil parity do not fundamentally
change. Indeed, in that case, extrapolation of the single-stack
TCO data would arrive at 3 MW, instead of 1.5 MW for 2.0 V/kg.
17074 i n t e r n a t i o n a l j o u r n a l o f h y d r o g e n e n e r g y 4 5 ( 2 0 2 0 ) 1 7 0 6 7 e1 7 0 7 5
Note that at this stage, there is not really a rigorous sci-
entific reasoning behind the single-stack cost line extrapola-
tions in Figs. 7 and 9. It is a mere empirical observation, but
still a rather reliable one since based on two independent in-
dustrial data sets over a relatively large power scale. It is also
important to realise that the obtained extrapolated single-
stack power for fossil parity is not a unique number, but
something that is specific to each stack geometry (e.g. the
number and area of electrodes used). For instance, the Nor-
wegian HydrogenPro already has a 3.7 MW single-stack alka-
line electrolyser on the market, while the Belgian-Chinese
Cockerill Jingli Hydrogen even sells 7.5 MW single-stacks, to
the best of our knowledge the largest single-stack on the
market.
The challenge on the electrolyser level is then to try to
technologically implement this single-stack extrapolation in
order to arrive at higher single-stack power levels. As the
number of cells/stack seems to have reached its limit [18], an
alternative option is to increase the specific area of each in-
dividual electrode, e.g. by replacing classical 2-D plates by 3-D
foams [29,30] hence allowing for a higher current density
operation [31]. Incidentally, a recent European demonstration
project (Demo4Grid) showing the technical feasibility and
greening potential of a single-stack 4 MW alkaline electrolyser
has been launched in that sense [32]. Such small-scale fossil
parity has the important advantage of allowing a decentral-
ised local H2 production. Renewables can then be harvested
anywhere, and used directly for the local production and
consumption of green electrolytic hydrogen. This will not only
allow to open up todays market to electrolytic H2 in a number
of small unit scale segments (like iron & steel and glass
manufacturing, cfr. Table 1), but also to widen the use of green
electrolytic H2 to a number of new small-scale markets (like
the food industry targeted in Ref. [32]). This is a significant
paradigm shift with respect to the current large-scale fossil
fuels (SMR) based centralised hydrogen production, the latter
also requiring an additional cost to transport the H2, both in
terms of V/kg and CO2 footprint.
Conclusion
In this paper, we have addressed the question what would be
an economically viable (minimum) production scale for green
hydrogen, produced from water electrolysis using renewable
electricity. A realistic benchmark to do so is the current price
of grey hydrogen produced by fossil-based and thus CO2
intensive processes (the so-called fossil parity), currently
estimated at 2,0 V/kg. Firstly, we acknowledged the promising
market opportunities for such green hydrogen in todays H2
markets. The latter represent about 60 Mt/yr, and can be
classified in 4 major applications, all of them having their own
typical unit size in terms of equivalent H2 demand, ranging
from a few hundreds of kW up to several GW. Secondly, it was
shown how, based on current state-of-the-art CAPEX data for
todays multi-stack electrolysers and using a renewable elec-
tricity price of 30 V/MWh, such fossil parity can be reached
already today at 50e100 MW. This is about the same scale as
the smallest SMR installations. Finally, using the most recent
TCO values for electrolytic hydrogen, it was concluded that
fossil parity could potentially also be reached at a much
smaller production scale, on the order of a few MW. Although
this still requires a further intensification of the water elec-
trolysis process, e.g. by extending the power range of a single-
stack electrolyser, such small-scale fossil parity provides an
important paradigm shift. Indeed, with respect to the current,
large-scale fossil fuels (SMR) based centralised hydrogen
production, it has the important advantage of allowing a
decentralised local H2 production. Renewables can then be
harvested anywhere, and used directly for the local produc-
tion and consumption of green electrolytic hydrogen, in line
with the small-scale local H2 demand.
Acknowledgements
We cordially thank Eric Dane from NEL and Henrik Steen
Pedersen from GreenHydrogen for providing their state-of-
the-art CAPEX and TCO data on electrolytic hydrogen. This
paper was realised within the framework of the Hydrogen
Technology Collaboration Programme (TCP) of the Interna-
tional Energy Agency (IEA), more specifically Task 38 on
Power-to-Hydrogen. It also benefited from a number of

dric Philibert
insightful discussions with Uwe Remme and Ce
at the IEA's Energy Technology Policy Division and the
Renewable Energy Division, respectively. Finally, financial
support from the Public Service of Wallonia e Dept. Of Energy
and Sustainable Building is gratefully acknowledged for
allowing these fruitful interactions with the IEA.
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